-$1b in free fertiliser to be shared to farmers
-VAT to be lifted from concrete board, sheet rock
President Irfaan Ali yesterday announced a homebuilder’s agency to help those with house lots to get their homes constructed and to assist with access to financing.
This sweeping new initiative was announced together with measures to ease the cost of living which will see a one-off $25,000 payment to riverain and hinterland households, the distribution of $1b worth of free fertilisers to farmers and the removal of VAT from sheet rock and concrete board.
The one-off payment and fertilisers will be financed from the $5b allocation in the 2022 budget to ease the cost of living. These two measures will cost $1.8B.
The Home Construction Assistance Facility targets house lot holders who are unable to build and who face challenges.
Explaining how the initiative is proposed to work, he said persons who have a house lot and are in need of government help to construct a home on that lot whether it is government-allocated or privately- owned may register their interest with the unit that will be established soon for this purpose.
At the time of registration, the applicant will also select from among three standard pre-designed models at a cost of $7 million, $9 million and $12 million, depending on their income level.
“The government will support the applicant through the process of applying for bank financing to meet the cost for constructing the home and will also look at helping in the initial phase of construction by the release of resources to expedite the construction process and help in bringing the banks and homeowners together so that you can own your own home,” President Ali announced.
The President explained that while they will help in the process of applying for bank financing to meet the cost of constructing the home, the title to the house lot will be pledged as collateral.
Noting that many persons have been expressing interest in homes already constructed under the Ministry of Housing and Water’s homeownership drive, he said that government will also construct homes on behalf of applicants.
“Government will also undertake the construction of a home on behalf of the applicant and deliver to the applicant a complete home in accordance with the option selected. We expect that this measure will help to drastically accelerate the capacity of Guyanese families to own and occupy their own home,” Ali asserted.
Expanding on the housing initiative, Ali said it will ease the burden of
persons having to rent properties and accelerate the development of housing schemes. Most of all, he pointed out that the unit will eliminate the complexities and hassle of building a home for the first time. Many Guyanese, he noted do not have the experience to enable them to build their own home and are caught up with the demands of day-to-day work.
Additionally, he said this measure has tremendous benefits as it will accelerate activities in the construction sector, provide opportunities for easy financing and host a number of services under one umbrella.
“We have seen over the last months tremendous interest in the government-constructed homes or houses. And our ability to service that interest, has driven us to this conclusion that there is a great need in society for prospective homeowners to have a one stop (or) a comprehensive solution and this measure aims at doing this. Taking away the burdens from prospective homeowners of going to the bank … getting them self-qualified, all of this will be brought under one umbrella. One home ownership management umbrella to make it easier to own your own home,” the President explained.
He also announced that removal of VAT from concrete board and sheet rock will be in place until the market stabilises. The measure will see approximately $100M annually being removed from VAT revenues.
“This measure is expected to cost $100M annually, but will provide critical additional relief to persons constructing their homes, in keeping with our Government’s strong commitment to making homeownership affordable to every single Guyanese family,” he said.
One-off relief
Cognisant of the hardships families residing in the riverain and hinterland communities face, President Ali said that a special one-off grant of $25,000 will be given to every single household in those communities. These households, Ali said have been facing extreme hardships as they have been negatively impacted by the spike in the cost of living.
Turning his attention to farmers who have registered their concern over the rising cost of fertilisers, the President said that the government will be distributing $1b worth of fertilisers free of cost to farmers.
He stated that this measure is vital to cushion the impact of the cost of living on Guyanese and noted that government’s procurement of the fertiliser will allow for scaling up of production and having an adequate supply to ensure there is price stability for produce.
“In order to cushion the impact of the rising cost of fertiliser on farmers and to limit the pass through to food prices. My government will be purchasing $1b worth of fertiliser for free distribution to farmers to use in their planting and replanting activities. Considering that fertilisers … will significantly reduce input cost and help ensure scaled up production and adequate supply of output which is critical to maintain price stability,” he said.
Ali in his opening remarks pointed out that the prices for fertilisers on the world market rose by 80% in 2021 and have already risen by a further 30% since the start of 2022.
Urea, one of the main fertilisers used here by farmers, the President said was trading at US$245 per metric tonne in December 2020 but as of last month the average price for urea was pegged at US$925 per metric tonne. The sharp increase reflects the rapid surge in the price of natural gas which is a key input in the production of fertiliser, Ali said.
Meanwhile, the Head of State said that his government remains in consultation with communities to find ways in which they can offer further relief to pensioners and vulnerable groups.
“My government continues to consult with the communities across the country with the aim of intensifying other measures to bring relief to the widest range of groups who have been affected by recent cost of living pressures…So our government is continuing the exercise of consulting with the people to see the best possible measures that can be brought on stream to support those people,” he added.
The President said that the harsh global conditions of the pandemic have upturned daily existence and through the repeated lockdowns of ports and factories have ravaged the economies. The raging war between Ukraine and Russia continues to cripple economies as both are large manufacturers and exporters of key commodities.
Upon taking office in the midst of the COVID-19 pandemic, the PPP/C government announced a one-off cash grant of $25,000 to every household in the country, thereby pumping approximately $7.9B into the local economy. He added that an additional $7B was paid out to flood-affected farmers following the devastating 2021 floods.
Ali noted that his government has also implemented measures to remove VAT from education, electricity, water, cellular phones, household necessities, medical supplies, basic construction materials and even capping the cost of freight to pre pandemic levels to eliminate high import taxes. He also pointed to the removal of the excise tax on fuel.
